Utilize the 2017 financial statements, annual reports, horizontal and vertical analysis for Amazon to calculate the following ratio. Calculate the gross margin for Amazon.

37% 35% 33% 36%

Amazon Horizontal/Vertical Analysis Information Amazon 12/31/2018 % change 12/31/2017 % change 12/31/2016 31,750,000 55 20,522,000 19,334,000 57 6,647,000 9,500,000 -9 16,677,000 41 17,174,000 7 75,101,000 25 440,0000 10,464,000 11,835,000 16,047,000 60,197,000 441,000 8,339,000 11,461,000 45,781,000 98 223,000 48,866,000 29,114,000 61,797,000 14,548,000 4,110,000 11,202,000 162,648,000 25 9 22 120 24 13,350,000 3,371,000 5,085,000 131,310,000 3,784,000 854,000 3,646,000 83,402,000 57 All numbers in thousands Period Ending Current Assets Cash And Cash Equivalents Short Term Investments Net Receivables Inventory Total Current Assets Long Term Investments Property Plant and Equipment Goodwill Intangible Assets Other Assets Total Assets Current Liabilities Accounts Payable Short/Current Long Term Debt Other Current Liabilities Total Current Liabilities Long Term Debt Other Liabilities Total Liabilities Stockholders' Equity Preferred Stock Common Stock Retained Earnings Treasury Stock Capital Surplus Other Stockholder Equity Total Stockholder Equity 38,192,000 10 1,371,000 1,271 34,616,000 100,000 37 -91 25,309,000 1,056,000 6,536,000 - -24 8,565,000 7,168,000 43,816,000 68,391,000 23,495,000 27,213,000 119,099,000 13 - 5 249 15 57,883,000 24,743,000 7,792,000 103,601,000 222 53 52 7,694,000 5,099,000 64,117,000 19,625,000 -2,872,000 26,791,000 -1,035,000 43,549,000 127 24 25 114 57 5,0000 8,636,000 76 -2,321,000 -18 21,399,000 24 -484,000 -51 27,709,000 5,000 4,916,000 -2,822,000 17,186,000 -985,000 19,285,000 44 Amazon Balance Sheet All numbers in thousands 12/31/2018 e t 12/31/2017 of 12/31/2016 31,750,000 20 20,522,000 16 19,334,000 6 Period Ending Current Assets Cash And Cash Equivalents Short Term Investments Net Receivables Inventory Other Current Assets Total Current Assets Long Term Investments 9,500,000 16,677,000 17,174,000 6 10 11 10,464,000 11,835.000 9 16,047,000 8 6,647,000 ,339,000 11,461,000 12 en 0 418,000 75,101,000 46 440,0000 1,329.000 60,197,000 441,000 1 45 0 45,781,000 223,000 48,866,000 37 29,114,000 61,797.000 14,548,000 4,110,000 11,202,000 162,648,000 38 9 3 7 100 13,350,000 3,371,000 5,085.000 131,310,000 10 3,784,000 3 854,000 4 3,646,000 100 83,402,000 34,616,000 26 25,309,000 Property Plant and Equipment Goodwill Intangible Assets Other Assets Total Assets Current Liabilities Accounts Payable Short/Current Long Term Debt Other Current Liabilities Total Current Liabilities Long Term Debt Other Liabilities Total Liabilities 38,192,000 1,371,000 23 1 100,0000 1,056,000 6,536,000 4 8,565,000 7 7,168,000 68,391.000 23,495,000 27,213,000 119,099,000 42 57,883,000 44 43,816,000 14 24,743,000 19 7 ,694,000 17 7,792,000 5 5,088,000 73103,601,000 7964,117,000 Amazon (in thousands) 12/31/2018 % change 12/31/2017 % change 232,887,000 30.93 177,866,000 30.80 139, 156,000 24.32 111,934,000 26.82 93,731,000 42.16 65,932,000 38.16 12/31/2016 135,987,000 88,265,000 47,722,000 Revenue Total Revenue Cost of Revenue Gross Profit Operating Expenses Research Development Selling General and Non Recurring Others Total Operating Expenses Operating Income or Loss 28,837,000 52,177,000 27.48 33.81 22,620,000 40.63 38,992,000 42.91 16,085,000 27,284,000 296,000 38.32 220,466,000 26.88 12,421,000 202.51 214,000 28.14 173,760,000 31.84 4,106,000 -1.91 167,000 131,801,000 4,186,000 Amazon.com Inc., Common-Size Consolidated Income Statement Dec 31, 2016 69.61% 30.39% 100.00% -64.91% 35.09% -12.96% -5.32% 12 months ended Dec 31, 2018 Dec 31, 2017 Net product sales 60.94% 66.66% Net services sales 39.06% 33.34% Net sales 100.00% 100.00% Cost of sales -59.75% -62.93% Gross profit 40.25% 37.07% Fulfillment - 14.61% - 14.20% Marketing -5.93% -5.66% Technology and content -12.72% General and administrative -1.86% -2.07% Other operating expense, net -0.13% -0.12% Operating income 5.33% 2.31% Interest income 0.19% 0.11% Interest expense -0.61% -0.48% Other income (expense), net -0.08% 0.19% Non-operating income (expense) -0.50% -0.17% Income (loss) before income taxes 4.84% 2.14% Provision for income taxes -0.51% -0.43% Equity-method investment activity, net of tax 0.00% 0.00% Net income (loss) 4.33% 1.71% -11.83% -1.79% -0.12% 3.08% 0.07% -0.36% 0.07% -0.22% 2.86% -1.05% -0.07% 1.74%